PEER COMPANIES

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PEER COMPANIES

MUMBAI: Divestments, including the sale of operational assets to reduce debt, have remained the dominant theme in the market in the past two months as reflected in the sharp rise in share prices of companies promoted by the GMR group and the Jaiprakash group.

The GM Rao family has gained the most, with market wealth increasing 60% to Rs 6,252 crore since September, while the wealth of the Jaiprakash Gaur family, which owns the Jaypee group, including Jaiprakash Associates, has climbed 12.96%. The other big gainer has been the Adani group. GMR Infrastructure shares have spurted 74% since mid-August.

The Sensex, which hit a 2013 low of 17,905 points on August 21, has recovered 14% since then.

Bombay Dyeing's Nusli Wadia also gained on reports that private equity investors are interested in buying a stake in the realty-to-textiles firm.

The market cap of GMR Infrastructure, which has been reeling under a massive debt of Rs 42,000 crore as on March 31, fell 31% since the beginning of the year till August. Then GMR sold its 70% stake in Singapore-based company Island Power for about Rs 2,600 crore and followed it up with the sale of a majority stake in a highway project for about $35 million. The stock has jumped 70% since September and is currently trading at 22.65 from its lows of 13.

Jaypee Group also sold some of its assets, such as the cement manufacturing unit in Gujarat to UltraTech Cement, to prune its debt by Rs 15,000 crore.

The promoters of Jaypee lost about 68% of their wealth between January and July. The debt-equity ratio for Jaiprakash Associates, the flagship company of the Jaypee Group, was 1.24 times at the end of March.

The Jaypee Group is also planning to cut about Rs 1,000 crore of debt on the books of its sports subsidiary, Jaypee Sports International, through a sale of the group's real estate assets. The Jaiprakash Associates stock is up 42% since September to 47.

Adani Ports, a unit of Adani Enterprises, sold the Abbot Point Terminal in January to the group's promoters, the Adani family. It had acquired the asset two years ago for about Rs 1,450 crore, along with a debt of $2 billion. The Adani group's total debt currently is around Rs 81,000 crore.

Some promoters such as Ajay Piramal, and of the Welspun and Kirloskar groups have lost wealth. Others like those of the Aditya Birla group and Sun Pharmaceuticals have been among the biggest gainers due to acquisitions and strong operational performance. The wealth of Kumar Mangalam Birla and family has climbed 21.94%, thanks to gains made by cement giant UltraTech, which acquired Jaiprakash Associates' Gujarat cement plant, and Idea Cellular, which recently became the group's most-valued company overtaking UltraTech.

Debt-ridden DLF has gained 12.32% since September after selling non-core assets to cut its debt of Rs 21,731 crore. In July, DLF sold wind turbine projects in Karnataka for nearly Rs 30 crore and 150 MW wind mills in Gujarat for Rs 325 crore. In April, the realty major sold wind turbine projects in Rajasthan and Tamil Nadu for about Rs 241 crore.

Sun Pharma is one of the biggest gainers in the Sensex and the Nifty this year as generic medicine continued to make inroads into the US, the world's biggest pharma market. Sun, with its portfolio of specialised drugs and operations in the US, is expected to benefit. The wealth of the family and associates of Dilip Shanghvi, the promoter and founder of Sun Pharma, has increased by 18.25% or Rs 81,118 crore.